Governments cannot afford to look away from cryptocurrencies anymore

Governments cannot afford to look away from cryptocurrencies anymore

Governments cannot afford to look away from cryptocurrencies anymore

The tech industry is celebrating the dawn of new era of decentralization. The market is anticipating major changes in the way we do things including currency and record keeping. The aspects that have to be dealt with on priority basis are the ability to enforce taxation and to control money laundering. I am all for entrepreneurs doing their thing and having tax breaks and the resulting trickle down effect but that cannot be sustainable without efficient and effective taxation and policing. One might argue that control is against the very essence of crypto revolution but the reality is far from a rosy Utopian garden. Imagine a business in a third world county in a post crypto period that will have to cough up crypto money to their local protection racket. Self regulation does not work when it comes to power, money and the everlasting cycle of greed.

If our customers started paying us in crypto then what motivation will we have to pay any tax at all? A lot of businesses will start to trade in crypto especially if they are trading across the border for services that do not result in tangible goods that need shipping. For larger organisations the audit process will ensure that there is some control but we all know that corporate already avoid taxes by using various schemes designed by the very people who advise governments on taxation.

The libertarians among us might not have a problem with this but I believe that a very important role of a government is to regulate aspects of the economy and take care of the those who can do with some assistance. If the crypto currency becomes the norm then how will monitory policy be effective? I know that crypto is not going to completely replace fiat currency to that level very soon but once a significant portion of the economy becomes crypto based, the monitory policy of the governments will become tricky if not downright ineffective.

Crypto can be banned but cannot be stopped so there is not point wasting time in that argument. The best solution will involve a symbiotic relation and coexistence with a well thought through policy towards crypto currencies. Dirty money for all purposes including terrorism, drugs and kickbacks will become untraceable if the system is not well designed to accommodate crypto currencies from the start.

All of this will have an impact on government revenues and eventually on wealth disparity where those at the bottom of the pyramid already struggling by the impact of AI, Automation and winner-takes-all business model will be further pushed into misery.

By Zeeshan Abbasi|2018-12-11T06:03:07+01:00August 29th, 2017|Technology|Comments Off on Governments cannot afford to look away from cryptocurrencies anymore